Pre-IFRS 16 | ||||||||
|---|---|---|---|---|---|---|---|---|
in millions of EUR | Reported 2019 | 2019 | 2018 | Change | Change at constant FX | Organic | Growth from acquisitions | |
Revenue | 4,039 | 4,037 | 3,721 | 8.5% | 8.7% | 5.1% | 3.6% | |
Comparable growth (%) | 4.1% | 4.1% | 3.4% | |||||
Adjusted EBITDA | 990 | 604 | 576 | 4.7% | 5.1% | 2.3% | 2.8% | |
Adjusted EBITDA margin (%) | 24.5% | 14.9% | 15.5% | -54bps | ||||
Adjusted EBITA | 475 | 443 | 426 | 3.9% | 4.6% | 1.4% | 3.1% | |
Adjusted EBITA margin (%) | 11.8% | 11.0% | 11.5% | -49bps | ||||
Net result | 195 | 193 | 237 | |||||
Net result attributable to equity holders | 178 | 176 | 216 | |||||
Adjusted earnings per share, basic (in €) | 0.91 | 0.89 | 0.91 | |||||
Earnings per share, basic (in €) | 0.70 | 0.69 | 0.85 | |||||
Number of stores (#) | 7,406 | 7,406 | 7,095 | |||||
System wide sales | 4,407 | 4,407 | 4,079 | |||||
Operational highlights
Demand for eye care continued to grow in 2019, driven by long term demographic trends, an increasing need for eye care around the world as well as consumers' focus on value, quality and fashion.
Thanks to these favorable underlying market trends and the continued execution of our commercial strategy, GrandVision achieved a strong year of topline performance, with 8.7% revenue growth at constant exchange rates and 4.1% comparable growth.
During 2019, GrandVision completed several acquisitions to strengthen our competitive positioning in key markets.
In January 2019, GrandVision acquired Charlie Temple, the leading online optical retailer in The Netherlands, which offers high-quality frames with single vision and multifocal lenses at competitive prices and, in some markets, next-day delivery. In February, we strengthened our position in the Spanish market through the acquisition of Óptica2000. In July, we completed the acquisition of McOptic, the third largest optical retailer in Switzerland. In total, acquisitions added 3.6% to revenue growth.
System-wide sales, which reflects the retail sales of GrandVision’s own stores plus that of its franchisees, increased by 8.0% to €4,407 million (FY18: €4,079 million).
Store network development
2019 | 2018 | |
|---|---|---|
Number of stores | 7,406 | 7,095 |
Number of own stores | 6,226 | 5,897 |
Number of franchise stores | 1,180 | 1,198 |
Number of countries in which GrandVision is present | 43 | 43 |
Number of retail banners | 30+ | 30+ |
Number of employees (average FTE) | 34,143 | 32,400 |
GrandVision expanded our store network by 311 stores during 2019 through acquisitions and store openings, which led to a total of 7,406 stores at year-end 2019. Of these, 6,226, or 84%, were our own stores and 1,180 were franchise stores.
Store network development
The store base grew strongest in the Other Europe segment through the acquisitions of Óptica2000 in Spain and McOptic in Switzerland, which added 170 stores across both markets, as well as store openings. In the G4 segment, the number of stores increased by 41 due to a combination of openings and smaller acquisitions, mainly in Germany and the Benelux. And in the Americas & Asia segment, the number of stores grew by 48, largely driven by store openings.
Stores by segment
IFRS 16 reporting impact
in millions of EUR | FY19 |
|---|---|
Occupancy costs included in pre-IFRS 16 adjusted EBITDA | 386 |
IFRS 16 impact on depreciation | - 354 |
IFRS 16 impact on net financial result | - 30 |
Total IFRS 16 impact (additional net income) | 2 |
The new leasing standard under IFRS 16 is effective for accounting periods beginning on, or after, 1 January, 2019. This resulted in the majority of the leases being recognized on the consolidated Balance Sheet, as the distinction between operating and finance leases is removed for leases where the entity is a lessee. Overall, GrandVision has close to 10,000 lease contracts in all countries that are subject to IFRS 16.
GrandVision has adopted the new standard on the required effective date using the modified retrospective transition approach, with the cumulative effect of initially applying IFRS 16 as an adjustment to the opening balance of equity on 1 January, 2019. GrandVision has therefore not restated the comparative amounts for the year 2018.
Reported net income for FY19 was positively impacted by IFRS 16, under which occupancy costs are split into depreciation of Right-of-Use assets and interest expense on lease liability. A reconciliation table is presented above.
For more details, please see Note 12 of the Financial Statements.
Revenue development
Pre-IFRS 16 | ||||||||
|---|---|---|---|---|---|---|---|---|
in millions of EUR | Reported 2019 | 2019 | 2018 | Change | Change at | Organic | Growth from acquisitions | |
G4 | 2,266 | 2,265 | 2,131 | 6.3% | 6.0% | 4.2% | 1.8% | |
Other Europe | 1,269 | 1268 | 1,130 | 12.2% | 12.3% | 4.0% | 8.3% | |
Americas & Asia | 505 | 504 | 459 | 9.7% | 12.1% | 12.1% | 0.1% | |
Total | 4,039 | 4,037 | 3,721 | 8.5% | 8.7% | 5.1% | 3.6% | |
GrandVision achieved revenue growth at constant exchange rates of 8.7% for the full year 2019 with organic growth of 5.1%. Comparable growth accelerated from 3.4% in 2018 to 4.1% in 2019, driven by a strong performance across all segments and product categories. Acquisitions, mainly Óptica2000 in Spain and McOptic in Switzerland, added 3.6% to revenue growth.
In 2019, all three regional segments delivered solid revenue growth. The Other Europe segment delivered the highest revenue growth overall due to acquisitions.
Among our product categories, contact lenses showed the highest growth rate, benefiting from the continued expansion of e-commerce sales. Overall, these sales grew by 66% as a result of Lenstore's ongoing growth, including the expansion into France and Italy, the acquisition of Charlie Temple in The Netherlands as well as growth in our retail brands.
Revenue in € million (pre-IFRS 16)
Comparable Growth
2019 Revenue by segment in € million (pre-IFRS 16)
Adjusted EBITDA development
in millions of EUR | Reported 2019 | 2019 | 2018 | Change | Change at | Organic growth | Growth from acquisitions | |
|---|---|---|---|---|---|---|---|---|
G4 | 616 | 421 | 411 | 2.3% | 2.2% | 0.4% | 1.8% | |
Other Europe | 315 | 195 | 176 | 10.9% | 11.2% | 6.1% | 5.1% | |
Americas & Asia | 100 | 29 | 20 | 46.4% | 57.2% | 57.5% | -0.2% | |
Other reconciling items | - 40 | - 41 | - 31 | |||||
Total | 990 | 604 | 576 | 4.7% | 5.1% | 2.3% | 2.8% |
Reported adjusted EBITDA increased from €576 million in 2018 to €990 million, largely due to the positive impact of IFRS 16, under which occupancy costs are split into depreciation of right-of-use assets and interest expenses on lease liabilities.
Excluding the effect of IFRS 16, adjusted EBITDA increased by 5.1% at constant exchange rates to €604 million in FY19 with 2.3% organic growth and a positive contribution of 2.8% from acquisitions, largely related to Óptica2000 and McOptic.
Adjusted EBITDA in € million (pre-IFRS 16)
Adjusted EBITDA margin
in millions of EUR | Reported 2019 | 2019 | 2018 | Change | |
|---|---|---|---|---|---|
G4 | 27.2% | 18.6% | 19.3% | -73bps | |
Other Europe | 24.8% | 15.4% | 15.5% | -18bps | |
Americas & Asia | 19.8% | 5.8% | 4.3% | 144bps | |
Total | 24.5% | 14.9% | 15.5% | -54bps |
The adjusted EBITDA margin decreased by 54 bps to 14.9% mainly due to higher central investments to support our digital and Product Value Chain strategies and operational challenges in a few key markets.
Reconciliation of adjusted EBITDA, EBITDA, EBITA and operating result
Pre-IFRS 16 | ||||||
|---|---|---|---|---|---|---|
in millions of EUR | Reported 2019 | 2019 | % of revenue | 2018 | % of revenue | |
Adjusted EBITDA | 990 | 604 | 14.9% | 576 | 15.5% | |
Depreciation and amortization Software | - 515 | - 161 | -4.0% | - 150 | -4.0% | |
Adjusted EBITA | 475 | 443 | 11.0% | 426 | 11.5% | |
Non-recurring items | -63 | -63 | -1.6% | - 20 | -0.5% | |
EBITDA | 927 | 541 | 13.4% | 557 | 15.0% | |
EBITA | 413 | 380 | 9.4% | 406 | 10.9% | |
Amortization and impairments | -89 | -89 | -2.2% | - 69 | -1.9% | |
Operating result | 324 | 292 | 7.2% | 337 | 9.1% | |
Non-recurring items of €63 million are related to impairment of software (€21 million), expenses related to the potential EssilorLuxottica transaction (€9 million), restructuring costs (€9 million), the discontinuation of activities in China (€4 million) and costs related to acquisitions and to the prior year.
In 2018, these items mainly related to restructuring, legal provisions, VAT risks, software impairment as well as corrections related to prior years.
EBITDA increased from €557 million in 2018 to €927 million in 2019, largely due to the positive impact of IFRS 16, under which occupancy costs are split into depreciation of right-of-use assets and interest expenses on lease liabilities.
Excluding the effect of IFRS 16, EBITDA decreased by 2.8% from €557 million in FY18 to €541 million in FY19.
Depreciation and amortization of software increased from -€150 million in 2018 to -€515 million in 2019, largely due to the depreciation of right-of-use asset under IFRS 16.
Excluding the effect of IFRS 16, depreciation and amortization of software increased by -€11 million during 2019 as a result of increased IT investments.
EBITA increased from €406 million in 2018 to €413 million in 2019 driven by the positive impact of IFRS 16, under which occupancy costs are split into depreciation of right-of-use assets and interest expense on lease liabilities.
Excluding the effect of IFRS 16, EBITA decreased by 6.4% from €406 million in FY18 to €380 million in FY19.
Amortization and impairments of -€89 million (-€69 million in 2018) includes a goodwill impairment charge of €51 million related to the U.S. as the operational performance of the For Eyes business remains below the performance targets of the business plan set out at the time of the acquisition in 2015.
Operating result (EBIT) decreased from €337 million in 2018 to €324 million in 2019, which includes the positive effect of IFRS 16, under which occupancy costs are split into depreciation of right-of-use assets and interest expenses on lease liabilities.
Excluding the effect of IFRS 16, EBIT decreased by 13.5% to €292 million in 2019, compared to €337 million in 2018, as positive adjusted EBITDA growth was offset by higher non-recurring items, depreciation and amortization as well as higher impairment charges.